Home of the Future

November 2015

106 pages

Frost & Sullivan

Report ID: 3365813

Summary

Table of Contents

European Consumer Demands for a Connected Lifestyle and Expectations for their Ecosystem

The smart and connected homes market is in a high growth phase at the moment, but it is also riddled with uncertainty about what will happen next in terms of technology, applications, business models, suppliers, and customer demographics. This study takes a detailed look at the expectation and requirements of end customers in Europe by examining attitudes and opinions towards all of the key elements of connected living. The analysis is based on interviews with 2,000 residential customers across Europe's 5 largest markets: Germany, France, the United Kingdom, Italy, and Spain.

Top FindingsAn Overview of the Survey Results

Cost is King: Despite the numerous benefits that smart home solutions can deliver, cost is at the heart of the decision making process. Adoption inertia will be evident whereby providers are unable to either subsidise or spread the cost of investment. On the flipside, consumers will invest in solutions that can provide tangible benefits—whether these savings relate to reduced energy consumption or improved levels of security.

Focused Opportunities Evident in Core Demographics: Italian and Spanish respondents show the strongest interest in smart home solutions. Unfortunately, consumers in these markets are also the most price sensitive—business models and price expectations must bear this in mind. Younger survey respondents are generally more interested in connected living, but, again, the spending power of this demographic is in some cases lower than their elder counterparts.

Functional Priorities are Changing: Security (including surveillance and home monitoring) currently has the highest penetration among existing users of smart home solutions, followed closely by connected home entertainment. However, customers attach the highest benefits to home heating and cooling management, suggesting a strong future growth outlook for smart energy control solutions.

Mobile Control: Smartphones are the favoured control method for connected home solutions; around % of respondents would opt for this interface, while dedicated remote control devices were less popular. In an app dominated world, this is perhaps unsurprising. Wearable devices are already creeping into consumer consciousness—almost % state a preference for this control method, despite the current penetration of such devices being far lower.

Visibility is Everything: Today, energy/utility providers are seen as the leading innovators for connected home solutions by nearly % of respondents. This is almost certainly due to their marketing activities and the dominance of highly valued solutions in areas such as energy management. By partnering with innovative vendors such as Nest and Hive, energy firms are developing a position of ‘innovation through association’.

Top ConclusionsWhat Can We Infer from the Results?

Connectivity-related Issues Must be Resolved: High-speed and reliable connectivity is the foundation for all smart/connected home services. Both the speed of connection into the home and the ability to access high-speed services throughout the home are essential. The survey results show that a significant proportion of respondents still have issues in both regards.

Consumer Aspirations will Change: Today, consumers show greatest interest in ‘traditional’ solutions including entertainment and security. But most benefit is seen in areas such as energy management, where cost drivers will come to prevalence. Companies targeting smart home opportunities should focus on the next wave of investment, in which the mainstream consumer will start to drive adoption.

A Push Rather than Pull Opportunity: Emphasis is currently on suppliers to innovate in order to drive market adoption; consumers are influenced by what they can see today rather than what might be available/possible in the future. Visibility is essential. Although energy providers are well positioned today, they are unlikely to be top innovators in the future smart home market. However, this early success does underline the value of developing vendor/channel partnerships to bring innovative technology to the masses.

Business Models are Yet to be Defined: There is no clear business model of choice in the smart home market, with subscription and monthly payment models sharing equal appeal. In addition, a considerable proportion of consumers is unwilling to pay for smart home solutions, which will limit market adoption. There are, however, positive signs. For example, over half of respondents would consider receiving advertising to reduce the costs of solutions. This is an evolving area, but innovation is essential to attract mainstream attention.

Market ContextDefining the Ecosystem of a Connected HomeThe Home of the Future is at the Heart of Connected LivingConnected Living Market PotentialVision of a Connected HomeConnected Home—Current State of PlayConnected Home—Development Roadmap

Technical Infrastructure of HomeTechnical Infrastructure—FranceTechnical Infrastructure—GermanyTechnical Infrastructure—ItalyTechnical Infrastructure—SpainTechnical Infrastructure—UKIssues Faced with Current Home ConnectivityTypes of Data Network at HomeCloud ServicesInstalled Control or Automation Applications at HomeInstalled Control or Automation Applications at Home by CountryInstalled Control or Automation Applications at Home by Age

6. GENERAL PERCEPTIONS OF SMART HOME SOLUTIONS

General Perceptions of Smart Home SolutionsConsumers are Aware of the Concept of Smart HomesPerception of Smart HomesMost Beneficial Areas for Smart Home SolutionsMost Beneficial Areas for Smart Home Solutions by CountryMost Beneficial Areas for Smart Home Solutions by AgeOverall Perceived Benefits of Smart Home SolutionsOverall Perceived Benefits of Smart Home Solutions by CountryOverall Perceived Benefits of Smart Home Solutions by Age GroupMain Obstacles against Smart Home SolutionsMajor Concerns against Smart Home Solutions by CountryMajor Concerns against Smart Home Solutions by AgePreferred Way to Control Smart DevicesPerception of Future Usage of Smart Home SolutionsAcceptance of Advertisements to Reduce CostsMost Innovative Companies to Provide Smart Solutions

Security and Home SurveillancePerceived Benefits of Smart Monitoring SolutionsPerceived Benefits of Smart Monitoring Solutions by CountryPreferred Way of Home InstallationMost Trusted Type of CompaniesPreferred Payment Models

9. HOME ENTERTAINMENT

Home EntertainmentPerceived Benefits of Home EntertainmentPerceived Benefits of Home Entertainment by AgePerceived Benefits of Home Entertainment by CountryMost Trusted Type of CompaniesPreferred Payment ModelsObstacles against More Multi-media Usage

10. HOME HEALTH AND HOME CARE SOLUTIONS

Home Health and Home Care SolutionsGeneral Interest in Connected Health SolutionsPerceived Benefits of Connected Health and Care SolutionsBenefits of Connected Health and Care Solutions by AgeBenefits of Connected Health and Care Solutions by CountryPreferred Ways to Control Connected Health and Care Solutions

11. HOME CONTROL

Home ControlPerceived Benefits of Home ControlPerceived Benefits of Home Control by AgePerceived Benefits of Home Control by Country

12. CUSTOMER PROFILE—FAMILIES WITH CHILDREN

Customer Profile—Families with ChildrenInternet Usage and Home Appliances—ParentsMeasures to Control Children‘s Internet UsagePerceived Benefits of Smart Home Solutions by Type of Family

13. CUSTOMER PROFILE—FROM EARLY ADOPTER TO STANDARD SEEKER

Customer Profile—From Early Adopter to Standard SeekerHome Devices and Control ApplicationsCloud Services in UseHome ConnectivityPerceived Benefits of Smart Home SolutionsLegal Disclaimer

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